Spike in private health insurance complaints in last two years

Peter Terlato 18 October 2016

Complaints doctor

Complaints, mostly related to benefits, have risen 25% since 2013/14.

While overall complainant satisfaction has increased slightly, the number of complaints to the Private Health Insurance Ombudsman have risen substantially over the past two years.

The findings were revealed as part of the Commonwealth Ombudsman's annual report, outlining complaints and disputes received about registered private health insurers.

The office of Private Health Insurance Ombudsman (PHIO) was merged with the Commonwealth Ombudsman last July.

Although complainant satisfaction rose from 84% in 2014/15 to 85% in 2015/16, the PHIO received a total of 4,416 complaints in 2015/16, up 3.5% on 4,265 complaints in 2014/15 and a 25% increase when compared with 3427 complaints registered in 2013/14.

The hike in the number of complaints isn't surprising considering research released last month, commissioned by the Medical Technology Association of Australia (MTAA), revealed 77.9% of Aussies believe private health insurers are motivated by money.

The ombudsman's office received almost 4,000 consumer information inquiries in 2015/16, with 59% of these submitted via consumer website privatehealth.gov.au.

Among the top five most complained about insurance companies were Medibank (AHM), BUPA, Hospitals Contribution Fund (HCF), NIB and HBF.

The greatest number of complaints registered against one specific insurer in 2015/16 was 1544 for Medibank (AHM), making up 40% of all complaints.

Most complaints were related to benefits (1359 complaints), followed by issues regarding membership (845 complaints), service (704 complaints), information (599 complaints), waiting periods (363 complaints) and rule changes (147 complaints).

Complaints referencing benefits pertained to sub-issues such as accident and emergency cover, ambulance call outs, gap payments, high cost drugs, prostheses and delays in payment.

While the majority of complaints (88%) were made about health insurers, there was a rise in complaints about verbal advice and incorrect information provided health insurance brokers in 2015/16, doubling year-on-year from 34 to 75 complaints.

Almost three quarts (72%) of complaints cases were resolved as assisted referrals, meaning they were referred directly to health insurers with the assistance of the PHIO. A further 16% of cases were resolved by providing an additional independent explanation for complainants.

If you're unsure what type of private health insurance you need, take a step in the right direction by comparing providers and costs to find the health fund that best suits your lifestyle and budget.

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